It’s important to do what’s right for you business, even if it means losing a job here or there. Make sure you have a stable of other tradespeople you feel comfortable referring to the client and let the client handle it. It’s not our job, and worse, it can hurt us big time in the end.
We recently visited a client’s home for a consultation. It was a huge apartment in NYC, approximately 4,000 square feet, and it sold for about $10 million dollars (I love being able to Google an address and find out what a property is worth because it helps put the project in perspective). The project included whole-home audio, mounting a few TVs, and setting up a robust network to cover the entire apartment, and setting up their phone system, all without running new wires. Luckily speakers were already in place, coax was in all the rooms, and Cat-5e had been run by the previous owner. So this project was mostly product, installation, and configuration.
We quickly informed the client that we do not handle telecom work and that another provider would have to work on their phone system. We just don’t do phones; they are extremely complex, the wiring is often ancient and a mess, and it is something that has bitten us in the butt in the past, so I won’t let it happen again. We recommended a couple of telecom providers, but just recommended them; we are not GCs and are not going to subcontract out work.
We are custom integrators. That means that we integrate a whole range of products—AV, lighting, shading, security, pool/spa, garage door openers, door locks, networks, etc. Just because you can integrate it into your system, doesn’t mean you can or should install it and doesn’t mean you need to manage the company that does. I will argue the point until I’m blue in the face.
I do realize that it is hard for us, as business owners, to say “no” to clients, but many times we have to for the sake of our business. It is worth the risk of losing the job, to keep your reputation. Let’s look at the possibilities. Say it is a large job. Let’s say you are mass-market integrator doing projects in the $5,000-50,000 range, without a core competency in telephone. A client comes with a $30,000 project that entails working with a complex phone system and old wiring and you take it on. You definitely stand the chance of a nice profit—somewhere in the neighborhood of $15,000. But what are the risks?
It could take several hours or even several days to figure out the phone system if it is more complex than expected. I’ve seen jobs where the wiring is spliced, split, and spliced again, making it almost impossible to trace the wires because every node tones out to all of the others and nothing is home run. Or worse, you are so deep in the weeds that you have to call in a specialist and pay his retail rates to fix it so that you can just get out of there. There goes the profit on the phone work!
The worst-case scenario: you can’t find someone to fix it in time, you can’t get it to work, and the client is pissed. Loss of profit opportunity is the least of your worries. Now you have your brand reputation to worry about. It doesn’t take many bad online reviews to ruin your business. One or two people saying “XYS AV doesn’t know what they are doing and couldn’t even finish the job” will absolutely kill your pipeline. Is it worth the risk? I’d say it’s better to risk losing the work than to take on something your company isn’t staffed and trained to handle.
And telecom is something you don’t need to be licensed to do (at least in New York and New Jersey). Security, electrical, and other trades require licensing and if you aren’t licensed to do it and you try to just install that one light dimmer, but five years from now there is a spark that causes a fire, you are going to be out of business. Your insurance won’t cover you, so you’ll lose your shirt in the lawsuit. You would have been better off to just have the client hire the electrician to get it done and then work side by side with them. Notice that I said, “have the client hire.” We don’t want to be general contractors either. Again, we aren’t licensed, insured, or bonded for that and can’t risk taking on that kind of liability.
Back to our $10 million home. The client actually had a telecom person they knew so they brought them in to handle the phone work. Turns out they were a great company to work with, knew their stuff, and we got along great. I now have a telecom company that I feel comfortable referring to other clients.